Join us this week as I interrogate Papa Tony and Dave Labarthe on their knowledge of trading terms. Do they really know as much as they intimate? Let's find out.
My name is Andrew Mark and we look forward to your company. If this is your first time here, The It’s MY Money show is all about private investors managing their own portfolios.
Welcome to our 10th episode of It’s MY Money! - this episode is packed full of extra fun. I know, complicated trading options and fun seem incongruous, but these guys are just so passionate about their clubs, and they have a knack of demystifying jargon, and well, it's just hard to keep the grin off their faces. Take a listen.
In this episode I promised to give a list of options terminology and so here are some terms you will hear on the show with many more to come in future episodes:
- Call: An option to buy stock at a set price and by a certain date/time.
- Put: An option to sell stock at a determined price within a determined period.
- Expiration date: When the options contract expires. It’s the future date that when it comes around you must action something on your contract.
- Strike price is the price you can buy or sell the stock at (if you choose this option)
- Premium: The price per share you pay for an option.
- Premium can be made up of:
Intrinsic value: This is the value of an option calculated between a stock’s current market price and the options ‘strike’ price.
Time value: An option's value based on how much time is left before the contract expires.
- Last: The price that was last paid or received when that option was traded.
- Bid: What a buyer would pay for an option. (If you're the seller this is the premium you'd collect)
- Ask: What a seller will accept for the option. (Or if you're the buyer, this is the premium you'd pay).
- Change: Percent the price changed since yesterday's closing price.
- Open interest: How many contracts are in play
- Volume: How many contracts are traded in a particular day.
We hope you enjoy this episode. As usual, if you have questions for Papa Tony or Dave please email us at [email protected] and subscribe and share us with a friend if you enjoyed this show.
Thanks for listening folks. There’s a new show out every week.
Remember, nothing you hear on the show should be construed as investment advice.